Following on from the fiscal event held on 23 September 2022, the UK Government has been under considerable pressure to react to the turbulent financial markets, who perceived the array of tax cutting measures pursuant to the fiscal event as being unfunded and therefore increasing the country’s national debt. Today the Prime Minster, Liz Truss, effectively sacked Kwasi Kwarteng as Chancellor of the Exchequer (Minister of Finance) and announced the appointment of Jeremy Hunt, as the new Chancellor; Edward Argar will take over from Chris Philp as Chief Secretary to the Treasury.
In a brief press conference this afternoon, the Prime Minister announced that she would keep the increase in the corporation tax rate announced by the previous government, which is predicted to raise some £18bn per year. Together with the announcement by Kwasi Kwarteng on 3 October that the proposed scrapping of the 45p tax rate would not go ahead there are now two U-turns from the Fiscal Event:
- The additional rate of income tax, which is charged at 45% on income over £150,000, that had been due to be abolished as from April 2023 will remain.
- The planned increase in the corporation tax rate as from April 2023 from 19% to 25% for companies generating more than £250,000 which had been cancelled further to the announcements in the Fiscal Event, will now go ahead.
Should you have any queries or questions in respect of the above, please do not hesitate to contact your main contact at Arnold Hill & Co LLP or Reuben Fevrier or Lucy Duncan.
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Contact Number – +44 (0) 207 306 9105
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Contact Number – +44 (0) 207 306 9102
The information in this article is believed to be factually correct at the time of writing and publication, but is not intended to constitute advice. No liability is accepted for any loss howsoever arising as a result of the contents of this article. Specific advice should be sought before entering into, or refraining from entering into any transaction.
